Q1 2025 Reliance Global Group Inc Earnings Call and Business Update

Andrew: [music].

Good day, everyone welcome to the reliance Global group first quarter business update conference call. At this time, all participants have been placed on a listen only mode and the floor will be opened for your questions and comments after the presentation.

It is now my pleasure to turn the floor over to your host Ted Davis Investor Relations Chad the floor is yours.

Speaker Change: Thanks, Kelly and good afternoon, and thank you for joining reliance global group's 2021st quarter financial results and business update conference call on the call with US today, Erez Rebating, Chairman and Chief Executive Officer of Reliance Global group and Jo Mark of its Chief financial Officer at reliance.

Speaker Change: Earlier today, the company announced its operating results for the quarter ended March 31, 2025, and the press release is posted on the company's website at Www Dot reliance Global group Dot com.

Speaker Change: The company will be filing its quarterly report on Form 10-Q, with the U S Securities and Exchange Commission, which can also be accessed on me.

Speaker Change: On the company's website as well as the SEC.

Speaker Change: Web site at Www Dot Dot Gov do you have any questions after the call or would like any additional information about the company. Please contact Crescendo communications at 2126711020 before me today to review the company's operating results for the quarter ended March 31 2025.

Speaker Change: We would like to remind everyone that this conference call may contain forward looking statements.

Speaker Change: All statements other than statements of historical facts contango its conference call, including statements regarding our future results of operations and financial position strategy and plans and our expectations for future operations are forward looking statements. The words anticipate estimate expect project plan intend believe may might.

Speaker Change: Will should could likely continued design and the negative of such.

Speaker Change: In other words in terms of similar expressions are intended to identify forward looking statements.

Speaker Change: These forward looking statements are based largely on the company's current expectations and projections about future events and trends that it believes may affect its financial condition results of operations strategy short term and long term business operations and objectives and financial needs.

Speaker Change: Forward looking statements are subject to several risks uncertainties and assumptions as described in the company's Form 10-K filed with the U S Securities and Exchange Commission.

Speaker Change: These risks uncertainties and assumptions the forward looking events and circumstances discussed in this conference call may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward looking statements.

Speaker Change: You should not rely upon forward looking statements as predictions of future events, although the company believes that the expectations reflected in the forward looking statements are reasonable it cannot guarantee future results level of activity performance or achievements. In addition, either the company or any other person as soon as responsibility for the accuracy and completeness of any of these forward.

Speaker Change: Looking statements the company disclaims any duty to update any of these forward looking statements. All forward looking statements attributable to the company are expressly qualified in their entirety by these cautionary statements as well as others made on this conference call you should evaluate all forward looking statements made by the company in the context of these risks and uncertainties, having said that I would.

Ajay Repayment: I'd like to turn the call over to as repayment, Chairman and Chief Executive Officer of Reliance Global group.

Speaker Change: Yes.

Speaker Change: Thanks, Ted and.

Speaker Change: Good afternoon, and thank you to everyone for joining us today.

Speaker Change: I am pleased to report that we're starting off 2025 on a strong note with improved financial results that build on the solid momentum. We've established in 2024, we've seen meaningful growth in our organic revenues, which speaks to the progress we're making in expanding our market share at the same time, we significantly reduced our net loss and delay.

Speaker Change: And an increase in EBITA. These gains reflect the continued benefits of our disciplined financial approach the efficiencies we've achieved through our streamlined one firm operating model and the absence of impairment charges that impacted last year's results.

Speaker Change: Altogether the momentum we're seeing has strengthened our foundation and position to realize global groups with scalable long term growth growth with greater profitability. One of the most exciting developments. This quarter was the launch of rely auto leasing a transformative new service that enables our rely exchange agency partners to offer vehicle leasing to clients.

Speaker Change: Any vehicle delivered to any location in the U S. While earning commissions on both the lease and the related insurance policy.

Speaker Change: This service is fully integrated into the agent dashboard, requiring no additional training and auto finance.

Speaker Change: Agents know Ken guide clients to the leasing options during standard policy consultation whether for new vehicles or replacements after accidents clients benefit some competitive pricing.

Speaker Change: Nationwide delivery and advanced insight into how different vehicles may impact their premium.

Speaker Change: This integration deepens client relationships that address introduces a powerful recurring revenue stream for our partners.

Speaker Change: Early feedback from agents has been outstanding and we believe this innovation further distinguishes rely exchange with a complete solution for independent agencies.

Speaker Change: We're also nearing completion of the retina is associated with acquisition and strategic transaction that will expand our market footprint and enhance our agency network spend.

Speaker Change: They're brings deep experience in personal and commercial lines, along with strong client relationships and a proven team of agents there integration will add scale complement our existing capabilities and create immediate cross selling opportunities across rely exchange offerings, particularly quote on bi and rely on others.

Speaker Change: We expect this acquisition to contribute meaningfully both to both revenue growth and margin improvement through synergies and we view it as a significant step toward.

Insured tech growth strategy with these milestones rely on leasing the continued enhancement of our quote to bind platform and the upcoming spreading their associates integration, we are more confident than ever in our trajectory towards the scalable long term growth each initiative as meaningful dimension to our strategy of expanding expanding services.

Speaker Change: As for our agency partners, increasing revenue opportunities and strengthening our presence across key markets.

Speaker Change: We like all the leasing introduces a powerful new offering that allows agents to better serve their clients, while generating additional income a quote and bind platform continues to streamline the insurance process automation and expanded carrier access. Meanwhile, the integration of <unk> Veterinary associates is expected to broaden our footprint.

Speaker Change: <unk> capabilities and create valuable cross selling opportunities across the platform together. These efforts reflect our ongoing commitment to innovation disciplined growth and shareholder value. We look forward to building on this momentum as we move through 2025 and beyond I.

Speaker Change: I would like to now turn the call over to Joe Margolis, Chief Financial Officer of reliable Global to review the financial results for the quarter ended March 31 2025 Joel.

Joe Margolis: Thank you very much and good afternoon.

Joe Margolis: It would be my pleasure to share with you some of our key financial highlights for quarter ended March 31 2025.

Joe Margolis: All figures presented are approximates.

Joe Margolis: Net income increased by $174000 or 4% to $4 $2 million in Q1, 25 compared to $41 million in Q1 24.

Joe Margolis: The 4% increase reflects encouraging continued organic growth across our choice distribution channels Commission.

Joe Margolis: Commission expense increased by $200000 to $1 5 million in Q1 25 compared to one 3 million Q1, 'twenty four increase.

Joe Margolis: The increase reflects higher payouts to agents in line with the increased revenues.

Joe Margolis: Salaries and wages increased by 400000 to $2 2 million in Q1 25 compared to one 8 million in Q1 'twenty for $400000 increase is primarily due to noncash equity awards in the amount of $540000 and removing the impact of these noncash equity charges salaries and wages actually decrease.

Joe Margolis: Every quarter.

Joe Margolis: Testament to cost efficiencies deployed by the company, while still being able to grow revenues.

Joe Margolis: General and administrative costs increased by $140000 $25 million in Q1, 25 compared to one 4 million in Q1, 'twenty four primarily due to $485000 of noncash equity payments to certain of the company's directors and service providers I went and removing the impact of the non.

Joe Margolis: Cash equity charges general and administrative costs show actually decreased quarter over quarter reflection of management's disciplined approach to cost controls and the success of our one son business model.

Joe Margolis: Net loss decreased by $3 $6 million or 68% to $1 $7 million in Q1, 25 versus $5 $3 million in Q1 24.

Joe Margolis: This substantial 68% improvement.

Joe Margolis: I've known as asset impairment charges during our current quarter and the company continue to remain laser focused on streamlining its operations, increasing its revenues and controlling its cost.

Joe Margolis: EBITDA, our adjusted EBITDA metric, a non-GAAP measure, but key company performance indicator improved significantly by 300% in Q1 25 from a loss of 74000 in Q1 24 to a gain of 145000 in Q1 25.

Joe Margolis: $220000 increase in.

Joe Margolis: This marks another quarter of everyday gain for the company and demonstrates our continued trend towards sustained and increased profitability.

Speaker Change: In summary, as mentioned Badger I've gotten off to a very good start in 2025 with exciting organic growth in our revenues decreasing cash operating costs and increasing net EBITDA gains.

Speaker Change: We now have a scalable operating model focus on innovation and expansion of our market footprint.

Joe Margolis: Gannett and acquisitive growth, we remain firmly committed to continuing to build a highly profitable business enterprise to deliver long lasting value to our employees investors and shareholders.

Joe Margolis: We'll now turn the call back to the operator to open the lines for questions comments and or feedback operator.

Speaker Change: Certainly the floor is now open for questions. If you have any questions or comments. Please press star one on your phone at this time, we ask that we're posing a question you. Please pick up your handset. That's what this thing on a speaker phone to provide the optimum sound quality. Please hold while we poll for any questions.

Speaker Change: Your first question is coming from Nicole Kauffman at Black Ranch capital Nicole. Please pose your question your line is live.

Nicole Kauffman: Good afternoon, gentlemen, thanks for taking my call my questions and congrats on the positive quarter.

Speaker Change: My first question is related to this Aetna acquisition. So once this is complete can you share some insights into the key benefits that's up there will bring to reliance.

Speaker Change: Yeah sure that's where we're excited about that Oh God willing a festival brings us two very important you know a significant increase in EBITA positivity.

Speaker Change: You know profitability and also doubles our revenue.

Speaker Change: And that doesn't even take into account the amazing.

Speaker Change: And tremendous cross selling upselling potential remember they service over 85000 employees and we have many insurance product that they haven't had access to til now so we really see that as a tremendous.

Speaker Change: <unk> potential as well aside from the intrinsic on day one.

Speaker Change: The increase in profitability and and revenue, but we're really excited about it.

Speaker Change: Well, thank you for that and then going into adjusted EBITDA. So congrats on achieving positive adjusted EBITDA again, obviously this is an important milestone.

Speaker Change: What were the key drivers behind the positive adjusted EBITDA in the first quarter and how do you see it trending moving forward.

Speaker Change: So I think the I mean, it's really a multi approach not just one focusing like John mentioned on the one firm approach streamlining expenses when we can across the different agencies.

Speaker Change: Well, so the cross selling and offering more selling ability as two of our in house agents and the down line agents.

Speaker Change: And of course focused also on.

Speaker Change: Good old fashion, not wasting money trying to be cost conscious when an amount. We know as time goes on you'll see where to spend the money and where not to waste money. So the combination of increasing revenue I believe actually showed on the reducing expenses and we look forward actually with today more and more technology available.

Speaker Change: To all of these areas to improve.

Speaker Change: What's even more exciting increases.

Speaker Change: Well. Thank you very much I appreciate that insight if I have a another question I'll I'll hop into the queue. Thank you.

Speaker Change: Thank you very much.

Speaker Change: Once again, if there are any remaining questions or comments. Please press star one at this time, please hold them on that while we poll for any additional questions.

Speaker Change: Okay.

Speaker Change: There are no additional questions in queue at this time I would now like to turn the floor back over to management for any closing remarks.

Speaker Change: Thank you and behalf of Azure and entire airlines team. We appreciate your participation in today's business update.

Speaker Change: Our enthusiasm about the horizon for alliance I'm Grateful to you our valued shareholders and stakeholders for being with US on this onward journey to get thank you and all the very best.

Speaker Change: Okay.

Speaker Change: Thank you everyone. This does conclude today's conference call. You may disconnect. Your phone lines at this time and have a wonderful day. Thank you for your participation.